According to early economic data, UK retail price inflation remained near record highs in April, despite a slight slowdown. In particular, food prices saw a record high increase of 15.7% year-on-year. This news is concerning for consumers, who may see their purchasing power decrease as a result.
Investors will be closely monitoring the eurozone Consumer Price Index on Tuesday at 1000 BST, as this will provide insight into the region’s inflation trends. On Thursday, the European Central Bank will announce its interest rate decision, which will also impact the market.
Several ECB officials have suggested that the central bank is not yet ready to break its rate hike cycle, and a strong core CPI print could prompt an even more aggressive approach. The expectation is that core price inflation will remain at a record high of 5.7%.
Prior to the ECB’s decision, the US Federal Reserve will announce its own interest rate decision on Wednesday. The market consensus is that there will be another 25 basis point increase, bringing interest rates to their expected high. This decision will also have an impact on global markets, as investors seek to understand the Fed’s outlook on inflation and the economy as a whole.
